Supreme Court finds pay agreements unconstitutional

A Supreme Court ruling today has serious implications for hundreds of thousands of workers whose pay is governed by registered employment agreements.

The five judge court upheld a challenge by some seven electrical contractors to the 1990 Registered Employment Agreement (REA) under which the Labour Court set legally binding pay and conditions in the electrical industry.

The REA was the result of a process laid down in Part III of the Industrial Relations Act 1946 but, the court ruled, Part III was unconstitutional essentially on grounds it amounts to delegated legislation.

Part II contravened the Constitution in that it delegated the making, variation and cancealltion of REAs to the Labour Court and the parties to such agreements, the court found.

The ruling has implications for many other workers whose pay and conditions are governed by REAs.

In its judgment today, the court noted the 1990 REA has been subject to a series of challenges and this particular action was initiated by a large number of claimants whose numbers had “shrunk dramatically” when verification of their status as electrical contrtactors was sought.

The High Court had refused to consider the constitutional challenge in the case on grounds of delay in brining the action, brought some 18 or 19 years after the REA entered into force.

The Supreme Court said it had “reluctantly” decided to consider the constitutional issue in the case, which, Mr Justice Donal O’DOnnell noted, had many “unsatisfactory aspects”. The constitutional issue was undoubtedly argued before the High Court in some detail although that court had not ruled on it, he noted.

Given another High Court decision striking down Part IV of the Industrial Relations Act, which provided for the Labour Court to establish Joint Labour Comittees for regulating pay and conditions, the judge also said the issue of alleged unauthorised delegation of legislative power had moved “centre stage”.

The issue was undoubtedly argued before the High Court in some detail, he said.

In their action against the Labour Court and the State, the contractors claimed the 1990 REA for the electrical industry was flawed because, they alleged, not all contractors were properly represented in negotiations at the Labour Court when the most recent terms and conditions were set.

They sought declarations the REA was invalid, in breach of the provisions of the 1946 Industrial Relations Act and breached their rights to earn a living under the Constitution and European Convention on Human Rights.

They claimed the Labour Court was wrong not to cancel the agreement in February 2009 following a request by 1,110 contractors to do so. The Labour Court and State denied the claims.

After the ruling Unite construction official Tom Fitzgerald warned employers against complacency and said the union now considered itself free to file pay claims as appropriate.

“While today’s news will understandably come as a shock to thousands of construction workers who fear their conditions of work may be under threat, the fact is that current terms and conditions continue to apply until re-negotiated,” Mr Fitzgerald.

“In that context, today’s judgement releases not only employers but also the trade union movement from certain constraints which have co-existed with the benefits of Registered Employment Agreements.”

The office of the Minister for Jobs, Enterprise and Innovation Richard Bruton said the Government was studying the judgment, and will take legal advice on it before commenting in detail.

The statement added: “The judgment has the effect of striking down Registered Employment Agreements put in place under the 1946 Industrial Relations Act. Agreements which set pay and conditions for workers in five sectors including electrical contracting and construction are affected by today’s judgment.

“Existing contractual rights of workers in sectors covered by Registered Employment Agreement are unaffected by today’s ruling. Contractual rights can be altered only by agreement between the parties involved”, it ended.

The Technical, Electrical and Engineering Union said the ruling erodes existing protection. The union’s general secretary Eamon Devoy said the electrical contractors have brought about a situation whereby foreign contractors will enter the country to undercut domestic operators.